Gen-i, the IT services subsidiary of Telecom New Zealand, is set to slash 120 of the 180 jobs the company has in Australia, and pass off some of its customers to its sister Telecom NZ company AAPT.

In a statement, Telecom New Zealand said that after 13 years in the market, Gen-i Australia will now focus on large corporate customers working across Australia and New Zealand, as the company's staffing is scaled back from 180 to 60, with some customer activities shifted to AAPT.

The company was up against the likes of Fujitsu, CSC, IBM, and UXC, and new Gen-i CEO Tim Miles said Gen-i Australia never had the scale to compete in the Australian market.

"We believe the time is right to return to Gen-i Australia's core purpose and renew our focus on trans-Tasman ICT services — an area where we have a strong track record of success, proven capabilities, an excellent roster of corporate customers, and the necessary scale to compete effectively," Miles said in a statement.

"The trans-Tasman market has good growth potential as the New Zealand and Australian economies grow closer together, facilitated by improved data connectivity."

Gen-i currently has offices in Sydney, Melbourne, and Brisbane.

Gen-i still has a number of Australian customers, and most recently signed a five-year deal with the Commonwealth Bank of Australia (CBA) to continue to provide contact centre services to the bank. The company had a much larger contract with CBA to provide voice and data services, but in 2008, Gen-i decided to pull out of the running for the AU$1.3 billion contract in order to focus on offering IT services rather than telecommunications services.